Loading ...BREXIT and the FED and Gold
Reply to a comment from DaveinThe UK
Good Points Dave
Maybe Brexit is being discounted now as you say
But as to a FED Hike being bearish for commodities and Gold ?
A Fed Raise in December fuelled a $200 run up in gold
Fed Raise in June = ???
Look we all know about as much about all this as is necessary to keep us confused
Never thought I’d say this but…Fundamentals are unknowable by all except Mr Market who it is said knows a full 6 Months before we Mortals….that’s why …Its ALL in the charts
We are all here because we Wanna make money trading gold …right ?
Well…there are still some who just wanna be right
But For those in the former ….We encourage you to learn some form of TA and understand price charts or you have NO CHANCE …trading on what you THINK should happen….think about it….yikes ( Most of us who have traded the PMs for a couple decades or more have learned this the hard way !) We have Scars and bruises in some very delicate places .
Charts …..as well as being very useful…. if you take the time to learn how to interpret them…are Endlessly Fascinating.
Rambus Motto Modified.
Give a man a chart and he eats for a day…Teach a man to chart and he starves..(but if he sticks with It) He eats for lifetime……even if sometimes its Crow.
🙂
HEY DAVE….I just realized You are IN The UK…..so what do you and your peers think is going to happen
Quebec tried to succeed from Canada with a vote and the seperatists lost by less that .01 %
One more person voted OUI and they would be out by now.
Scotland…pretty much ditto
So Britain ?
so whats your latest prediction fully… where to from here based on chartology?
I dunno
🙂
me niether… i dont have clue..
so is strategy to continue buy support potential even if it continues to decline .. or wait for confirmation on buy signal?
We obviously need a higher low in PM Charts
The Chartology support in Silver would be max 15.60ish
HUI 172 ish
Gold 1180-1185ish
If we go there and bounce…that would be very constructive
Hi Fully,
Thanks for the reply to my comment. I can’t find where I made the comment because were have been so many posts later. Actually, in the Dashboard on the forum it would be great if you could apply a filter just to see your own comments. Anyway I have now found my comment in a txt file on my computer. Wow, we just had a power outage and a big dip in the room lights at home. Maybe it’s the latest government scare tactic to say we will get power cuts if we leave the European Union!
So to the main subject: Brexit and Fed.
Here are two Brexit poll tracking sites:
https://ig.ft.com/sites/brexit-polling/
and
http://www.economist.com/blogs/graphicdetail/2016/05/britain-s-eu-referendum
‘Respectable’ sources but different results.
Take a look at the ‘Full list of individual polls’ on the FT page. The last 3 out of 4 polls have Brexit (as I write) equal or ahead after a much larger number of polls before that where the Remain vote is ahead. The polls either tend to have Brexit ahead by a whisker or the Remain vote ahead by say 5%, so Brexit campaign has all the work to do, not least because of the endless stream of government and big corporate propaganda telling us the nation will be all but destroyed and burned to a crisp if we dare to leave the EU.
The Scotland vote in 2014 was interesting. In the end it went to the Stay In The UK vote by about 55% to 45% (a 10% margin, more than expected – and probably more than the margins of many gold mining companies :-O ) after many polls had it almost neck and neck up to the last days.
So the Independence campaign lost but then a few months later the Scottish National Party took about 56 out of the 59 Scottish seats in the Westminster London parliament. So the Scots chickened out of voting for actual independence but there must have been a huge backlash afterwards to reject the establishment parties in the UK General Election in 2015.
I think the same will probably happen over Brexit. A number of Leave voters will likely chicken out at the last minute on the deluge of government scare stories and they will capitulate. Afterwards, they will realize what a mistake they made and will do all they can to back the leave campaign and UKIP when it’s too late. The Leave campaign has one hope, well, two.
Firstly the potential apathy of the Remain voters; hopefully it will rain on 23 June and they will stay at home while the Leave voters will do the business and get their ass to the polling station to put down their X on the piece of paper. Not a lot to ask to win back your country I would say compared to my Dad who spent 6 full years away from home in World War 2, eh?
Secondly, the immigration genie came out of the bottle again over the past few days: maybe that has turned voters back towards the Leave side. Net migration into UK was 333,000 in the last year; most unemployed or so it seems. The govt has no hope, idea or intention to do anything about it.
So, there you go, Fully. Fun times ahead? History about to be made, or not as the case may be!
Secondly Fully, about the Fed and their (perhaps) June rate hike.
Yes, the first one helped set off the rally in gold, or did it? There was soon some wordage out of Yellen mentioning negative rates were not completely out of the question – and negative rates seemed to spring up all over Europe and in Japan with a vengeance. That was a big change in psychology. Also the rate hike seemed to spook the stock market and there was some good bearish action. Gold moved opposite. There was a lot of talk about ONE AND DONE on the rate hikes and a fall in expectation from the idea of 4 more 1/4 point hikes in 2016 going down to 2 or 1 or 0.
NOW in May 2016 we have had no rate hike this year so far. So until proved otherwise, the Fed has not acted just waffled as usual. The dot plots for future rates took a dive in March as they balked on raising then.
The reason why I feared a second hike could be bearish for gold short term was that when/if it happens in June, there will have been one in the first half of the year to add to the one last December. The markets will then see one hike every six months and a rate rising cycle, not just a one off. They could then infer a 3rd one in December, one June 2017, one Dec 2017, etc. That is a fundamental change in psychology I think.
Of course, the Fed could be blindsided by a big uptick in CPI inflation owing to the halt of the commodities fall. I calculated that energy commodities contributed 0.84% to inflation year over year (y-o-y) to this February. they were down 12% and contribute 7% to the index. There was 3% inflaiton in services and overall CPI was 1.0%. If commodities go flat y-o-y, then that contribution will be 0 and inflation will go up 0.8 from 1.0 to 1.8% If commodities reversed their losses it would add 1.6 to headline CPI from 1.0 to 2.6, above target. Even a 0.8 increase in CPI would imply that THREE rate hikes are needed to catch up! No maybe that would light a fire under gold, who knows?
However in the very short term (1-2 months), I think gold could get hit by realization of a rate hiking cycle, a failed Brexit and still low CPI.
Failed Brexit ? = stronger Euro = Stronger Gold !!
POSSIBLY!! Always hope!
talking about this I see your more important point stated by a few on the site in the past few days that fundamental analysis is just a guessing game and watching the charts is probably a better thing to do!
NO brainer IMHO…Britain stays Euro soars
On inflation see here:
http://www.bls.gov/news.release/cpi.nr0.htm
April 2016 figures. Note that energy commodities and gasoline in particular rise sharply into April after big falls at the end of last year. So there has been a reversal but only a very short term one. If it sticks for a few months, it will spike CPI.
All noise perhaps of course but I’m not sure. Is it all in the charts? Maybe.
I think we overdid the response to the Fed one and done hike and the negative EU and Japan rates, cashless society talk and we spiked gold in Q1 2016 – a bit like in late 1999 on the Washington gold sales accord. So we are not guaranteed to be out of the woods, just yet.
Last point onthe Brexit poll.
The lefties, (you in the USA would probably say ‘commies?) the rich, the Scottish and the young and naive want to stay, the rest want to leave. You can see that on the chart here by clicking on the different categories:
http://www.economist.com/blogs/graphicdetail/2016/05/britain-s-eu-referendum
It’s quite fun: even 5% of UKIP supporters want to stay! DUH!